Prudential Norms for Classification, Valuation and Operation of Investment Portfolio by Banks – Spreading of MTM Losses and Creation of IFR

RBI has decided to grant banks the option to spread provisioning for Mark To Market (MTM) losses on investments held in Available For Sale (AFS) and Held For Trading (HFT) for the quarters ended 31st December 2017 and 31st March 2018, with a view to addressing the systemic impact of sharp increase in the yields on Government Securities.

RBI has stipulated that if banks utilise the above option, they would have to make suitable disclosures in their notes to accounts/quarterly results providing details of:

the provisions for depreciation of the investment portfolio for the quarters ended December 2017 and March 2018 made during the quarter/year and

the balance required to be made in the remaining quarters.

Further, RBI has advised all the banks to create an Investment Fluctuation Reserve (IFR) with effect from the year 2018-19, as detailed in the circular (see circular dated 2nd April 2018).

RBI has now decided that stand-alone plain vanilla forex options (without attached structures) purchased by clients will be exempt from the ‘user suitability and appropriateness’ norms, and the regulatory requirements will be at par with forex forward contracts.

RBI has observed that there has been considerable growth in the payment ecosystem in India, which necessitate adoption of safety and security measures. Also, it was identified that not all system providers store the payments data in India.

In order to ensure better monitoring, it is important to have unfettered supervisory access to data stored with these system providers as also with their service providers, intermediaries, third party vendors and other entities in the payment ecosystem. RBI has decided that:

All system providers shall ensure that the entire data relating to payment systems operated by them are stored in a system only in India. This data should include the full end-to-end transaction details, information collected, carried and processed as part of the message or payment instruction. For the foreign leg of the transaction, if any, the data can also be stored in the foreign country, if required.

System providers shall ensure compliance of the same within a period of six months and report compliance of the same to RBI latest by 15th October 2018.

System providers shall submit the System Audit Report (SAR) on completion of the requirement stated above. The audit should be conducted by CERT-IN empanelled auditors certifying completion of the above activity. The SAR duly approved by the Board of the system providers should be submitted to RBI not later than 31st December 2018.

RBI has cautioned users, holders and traders of Virtual Currencies (VC), including Bitcoins, regarding various risks associated in dealing with such virtual currencies.

Considering the associated risks, RBI has decided that, with effect from 6th April 2018, entities that are regulated by RBI shall not deal in VCs or provide services for facilitating any person or entity in dealing with or settling VCs. Such services include maintaining accounts, registering, trading, settling, clearing, giving loans against virtual tokens, accepting them as collateral, opening accounts of exchanges dealing with them and transfer/receipt of money in accounts relating to purchase or sale of VCs.

RBI has advised regulated entities which already provide such services to exit the relationship within three months from 6th April 2018.

At present, transactions under the Liberalised Remittance Scheme (LRS) are being permitted by Authorised Dealer (AD) banks based on the declaration made by the remitter. The monitoring of adherence to the limit is confined to obtaining such a declaration without independent verification, in the absence of a reliable source of information.

To improve monitoring and to ensure compliance with the LRS limits, RBI has decided to put in place a daily reporting system by AD banks of transactions undertaken by individuals under LRS, which will be accessible to all the other ADs. Thus, from 12th April 2018, all AD Category-I banks are required to upload daily transaction-wise information undertaken by them under LRS at the close of business of the next working day. In case no data is to be furnished, AD banks shall upload a ‘Nil’ report. AD banks can upload the LRS data by accessing XBRL site in the format as specified in the circular (see circular dated 12th April 2018).

RBI has further rationalised and liberalised the External Commercial Borrowings (ECB) guidelines covering:

Raising of ECB is not permitted for the purpose of:

The list of eligible borrowers for the purpose of ECB has been further expanded so as to include Housing Finance Companies regulated by the National Housing Bank, Port Trusts constituted under the Major Port Trust Act, 1963, etc.

Increasing the ECB liability to Equity Ratio for ECB raised from direct foreign equity holders under the automatic route to 7:1. This ratio will not be applicable if total of all ECBs raised by an entity is up to USD 5 million or equivalent.

All-in-cost for ECB under all tracks and Rupee Denominated Bonds (RDBs)

Investment in real estate or purchase of land except when used for affordable housing as defined by Government of India, construction and development of Special Economic Zone (SEZ) and industrial parks/integrated townships.

After issue of the revised framework for FPI in debt, RBI has now announced other changes affecting operational aspects of FPI investments in debt, in consultation with SEBI (see circular dated 27th April 2018). Changes made in operational aspects of FPI investment in debt are as below:

The minimum residual maturity requirement for investment in Government bonds, Central Government securities and SDL has been revised.

FPIs are now permitted to invest in Corporate bonds with minimum residual maturity of above one year. Earlier minimum residual maturity was three years.

The cap on aggregate FPI investments in any Central Government security, has been revised from 20 percent to 30 percent of the outstanding stock of that security.

Online monitoring of Government securities utilisation limits is now done by Clearing Corporation of India Ltd (CCIL).

Concentration limit for investment by any FPI in Government securities, SDL and Corporate debt securities have been prescribed, as mentioned in the circular.

FPI investments in corporate bonds shall now be subject to single / group investor wise limit (see circular dated 27th April 2018).

Cash Management Activities of the Banks Standards for Engaging the Service Provider and its Sub-Contractor

With the increasing reliance of the banks on outsourced service providers and their sub-contractors in cash management logistics, RBI has decided and advised that the banks shall put in place certain minimum standards in their arrangements with the service providers for cash management related activities. In addition, RBI has directed banks to review their existing outsourcing arrangements and bring them in line with the instructions annexed to the circular, within 90 days from 6th April 2018 (see circular dated 6th April 2018).

Further, as the cash held with the service providers and their sub-contractors continues to remain the property of the banks and the banks are liable for all associated risks and to deal with any related contingencies, the banks are required to put in place an appropriate Business Continuity Plan approved by their boards.

Fifteen Non-Banking Financial Companies (NBFCs) have surrendered the Certificates of Registration granted to them by RBI. RBI, in turn, has cancelled these Certificates of Registration. These companies cannot transact the business of a Non-Banking Financial Institution, as laid down in clause (a) of Section 45-I of the RBI Act, 1934.

Following RBI’s cancellation of registration certificates of eight NBFCs, these companies cannot now undertake the business of a Non-Banking Financial Institution, as laid down under clause (a) of Section 45-I of the Reserve Bank of India Act, 1934.

On 27th September 2016, SEBI issued guidelines on algorithmic trading for National Commodity Derivatives Exchanges through which exchanges were required to put a limit on the number of orders per second from a particular Computer to Computer Trading (CTCL) ID/Automated Trading System (ATS) User–ID to twenty orders per second and to impose economic barrier for orders exceeding twenty per second. It was also stipulated that a system auditor empanelled by exchanges would undertake a system audit of algorithmic trading.

SEBI has relaxed the limit on the number of orders per second from a particular CTCL ID/ATS User–ID up to hundred orders per second and accordingly has revised its aforesaid circular. (Please see circular dated 3rd April 2018)

In addition, SEBI has done away with the requirement of empanelment of system auditors by the exchanges for system audit of algorithmic trading.

SEBI has decided to put in place a new system for depositories to monitor the foreign investment limits in listed Indian companies (see circular dated 5th April 2018). The key highlights of the circular are as below:

The system for monitoring the foreign investment limits in listed Indian companies shall be implemented and housed at the depositories - NSDL and CDSL.

A company will have to appoint any one depository as its designated depository for the purpose of monitoring the foreign investment limits.

Stock exchanges will have to provide the data on the paid-up equity capital of the company to its designated depository. This data includes the paid-up equity capital of the company on a fully diluted basis - total number of shares that would be outstanding if all possible sources of conversion are exercised.

The depositories need to provide an interface wherein a firm will have to give information including Company Identification Number (CIN), details of shares held by FPIs, NRIs and other foreign investors in demat as well as in physical form, details of indirect foreign investment, which are held in both demat and physical form.

In the event of any change in any of the details pertaining to the company, such as increase or decrease of the aggregate FPI or NRI limits or the sectoral cap or a change of the sector of the company, the firm needs to inform such changes along with the supporting documentation to its designated depository.

A red flag will be activated in case total foreign investment in a company is within 3 per cent or less than 3 per cent of the sectoral cap.

Under the new system, depositories need to inform the exchanges about the activation of the red flag for the identified scrip. Further, the exchanges will issue the necessary notifications on their respective websites.

Once a red flag has been activated for a given scrip, the foreign investors shall take a conscious decision to trade in the shares of the scrip, with a clear understanding that in the event of a breach of the aggregate limits or the sectoral cap, the foreign investors shall be liable to disinvest the excess holding within five trading days.

Such excess shares should be sold to domestic investors.

If a breach of the investment limits has taken place by FPIs, and such FPIs have failed to disinvest within 5 trading days, then necessary action will be taken by SEBI against them.

SEBI has directed depositories to put in place the necessary infrastructure and IT systems for operationalising the monitoring mechanism.

SEBI hasissued broad guidelines on algorithmic trading in the securities market to ensure fair and equitable access to the Co-location/proximity hosting facility offered by stock exchanges.

It has been decided to introduce the following measures in respect of the same (see circular dated 9th April 2018):

Managed Co-Location Services:

In order to facilitate small and medium sized trading members who otherwise find it difficult to avail of co-location facility, stock exchanges would introduce “Managed Co-location Services”.

Under the “Managed Co-location Facility”, space/rack will be allotted to eligible vendors by the stock exchange along with provision for receiving market data for further dissemination of the same to their client members and the facility to place orders (algorithmic or non-algorithmic) by the client members from such facility.

The vendors will provide the technical know-how, hardware, software and other associated expertise as services to trading members and will be responsible for upkeep and maintenance of all infrastructure in the racks provided to them.

Stock exchanges will supervise and monitor such facilities on a continuous basis.

Stock exchanges would need to ensure that multiple vendors are permitted for providing such services at their co-location facility.

Unique Identifier for Algorithms and Testing Requirement for Software and Algorithms:

Exchanges have been advised to allot a unique identifier for each algorithmic order (algo).

Exchanges are required to provide a simulated market environment for testing of software, including algos, in order to streamline and strengthen the process of testing of software and algorithms, such a facility may be made available over and beyond the current framework of mock trading prescribed by SEBI.

Penalty on OTR:

In order to ensure orderly trading, stock exchanges were advised to put in place effective economic disincentives for high daily Order-to-Trade Ratio (OTR) of algo orders placed by trading members. In order to encourage algo traders to place more orders closer to the Last Traded Price (LTP), the following modifications have been introduced:

Algo orders placed within 0.75 percent (as against the earlier norm of 1 percent) on either side of the LTP will be exempted from the framework for imposing penalty for high OTR.

The OTR framework will be extended to orders placed in the cash segment and orders placed under the liquidity enhancement scheme.

The exchanges will have to ensure that the tagging of each order and each algorithm with its unique identifier is completed by September 2018. Other provisions of the circular will need to be complied with by June 2018.

SEBI has issued clarifications with respect to clubbing of investment limits of foreign Government/foreign Government related entities as stated below (see circular dated 10th April 2018):

The purchase of equity shares of each company by a single FPI or an investor group shall be below ten percent of the total paid-up capital of the Company.

If the same set of beneficial owners invest through multiple entities, such entities will be treated as part of same investor group and their investment limits will be clubbed as single FPI. Accordingly, the combined holding of all foreign Government/its related entities from the same jurisdiction shall be below 10 percent of the total paid-up capital of the company.

It would be the prime responsibility of the FPI to disclose information with regard to the investor group.

The beneficial owner of foreign Government entitiesand its related entities shall be determined in accordance with Rule 9 of the Prevention of Money Laundering (Maintenance of Records) Rules, 2005. Investment by foreign Government agencies would be clubbed with the investment by the foreign Government and its related entities for the purpose of calculating the 10 percent limit for FPI investments in a single company, if they form part of an investor group.

The World Bank Group — International Bank for Reconstruction and Development (IBRD), International Development Association (IDA), multilateral investment guaranty agency (MIGA) and International Finance Corporation (IFC) — have been exempted from clubbing of the investment limits for the purpose of application of 10 percent limit for FPI investments in a single company.

FPIs investing in breach of the prescribed limit will have to divest their holdings within five trading days from the date of settlement of the trades causing the breach. Alternatively, the investment by such FPIs will be considered as investment under Foreign Direct Investment (FDI). However, the FPIs need to immediately inform of such option to SEBI and RBI, since they cannot hold equity investments in a particular company under FPI and FDI route simultaneously.

As per the framework, Beneficial Owner (BO) is the natural person, who ultimately owns or controls an FPI and should be identified in accordance with Rule 9 of the Prevention of Money Laundering (Maintenance of Records) Rules, 2005 (PMLA Rules). Accordingly, beneficial ownership of FPIs having structure of company or trust would be identified on controlling ownership interest and control basis. In case of partnership firm and unincorporated association of individuals, BOs would be identified on ownership or entitlement basis.

The materiality threshold for identification of BOs of FPIs on controlling ownership interest basis would be 25 percent in case of a company and 15 percent in case of partnership firm, trust & unincorporated association of persons.

In respect of FPIs from “high risk jurisdictions”, intermediaries may apply a lower materiality threshold for identification of BO and also ensure KYC documentation as applicable to Category III FPIs.

Where no material shareholder/ owner entity is identified in the FPI using the materiality threshold, the BO shall be the senior managing official of the FPI.

BO should not be a person mentioned in the United Nations Security Council’s Sanction List and should not be from a jurisdiction identified in the public statement of the Financial Action Task Force (FATF) as:

a jurisdiction having strategic AML and CFT deficiencies to which counter measures apply

a jurisdiction that has not made sufficient progress in addressing the deficiencies or has not committed to an action plan developed with the FATF to address the deficiencies.

Category II and III FPIs are required to provide a list of BOs in the prescribed format.

Non-Resident Indians (NRIs), Overseas Citizen of India (OCI) cannot be BO of FPIs. However, if an FPI is Category II Investment manager of other FPIs and is non-investing entity, it may be promoted by NRIs or OCIs. A resident Indian cannot be a BO of FPI.

There would be a comprehensive review of FPIs on a periodical basis. The KYC review would be done based on risk categorisation of FPIs.

For category III FPIs, which are high risk investors, audited annual financial statement or a certificate from auditor certifying net worth need to be obtained from such overseas investors. In case of new funds/companies/family offices, the audited financial statement of promoter would be required to be obtained.

At present, there are no specific guidelines to govern the depiction of performance of a surviving scheme, pursuant to merger of Mutual Fund schemes. Thus, in order to standardise performance disclosure of schemes once they have been merged, Mutual Funds have been advised to disclose the weighted average performance of the new as well as the old product and has decided the following:

The weighted average performance of both the schemes needs to be disclosed, when two schemes, having similar features, are merged and the surviving scheme also has the same features.

When the transferor scheme gets merged into the transferee scheme and the features of transferor or transferee scheme are retained, the performance of the schemes whose features are retained needs to be disclosed.

In case the transferor scheme merges with transferee scheme and a new product emerges after such consolidation, then the past performance need not be provided.

In addition, past performance of such a scheme, whose features are not retained post-merger, would also be made available on request with adequate disclaimer.

The provisions of the circular have come into effect from 1st May 2018.

The debt limit category of State Development Loans (SDL) has also been enhanced as below:

SDL-General has been enhanced to INR 34,800 crore on 12th April 2018 and INR 38,100 crore on 1st October 2018 from INR 31,500 crore.

SDL-Long Term has been enhanced to INR 7,100 crore.

The Corporate Debt Investment Limit (CDIL) has revised to INR 266,700 crore on 12th April 2018 and INR 289,100 crore on 1st October 2018 respectively from the existing limit of INR 244,323 crore.

Coupon reinvestment by FPIs in Government securities, which was hitherto outside the investment limit, will now be considered within the G-sec limits. However, FPIs may continue to reinvest coupons without any constraint. At the time of periodic re-setting of limits, coupon investments would be added to the amount of utilisation. Accordingly, for the year 2018-19, the stock of coupon investment of INR 4,760 crore as on 31st March 2018, would be added to the actual utilization under the General sub-category of Government securities.

The provisions of the aforesaid circular have come into effect from 12th April 2018.

During December 2017, SEBI permitted Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) to issue debt securities. SEBI has now clarified that REITs and InvITs would issue debt securities in the following manner (see circular dated 13th April 2018):

For issuance of debt securities, REIT or InvIT would appoint one or more debenture trustee registered with SEBI. However, a trustee of the REIT or InvIT is not eligible to be appointed as debenture trustee to such issuance of debt securities.

Any secured debt securities issued by REITs or InvITs would be secured by the creation of a charge on the assets of the REIT or InvIT or holding company or Special Purpose Vehicle (SPV), having a value which is sufficient for the repayment of the amount of such debt securities and interest thereon.

Trusts which have listed their debt securities would need to disclose the asset cover available, net worth, debt-equity ratio, debt service coverage ratio and interest service coverage ratio, in addition to financial disclosures.

While publishing the accounts, modified opinions in audit reports, having a bearing on the interest payment or redemption or principal repayment capacity of such trusts, need to be appropriately and adequately addressed by the board of the manager.

REITs and/or InvITs are required to submit the half-yearly financial results to the stock exchanges along with a statement indicating material deviations, if any, in the use of proceeds of issue of debt securities from the objects stated in the offer document on a half-yearly basis.

SEBI has amended its guidelines on Straight Through Processing (STP) Centralised Hub and STP Service Providers (see circular 17th April 2018). As per the amendment, STP centralised hub and STP service providers have to comply with the new eligibility criteria, i.e., the applicant has to be a fit and proper person in order to regulate the services and infrastructure set-up in respect of STP.

SEBI has issued detailed guidelines for streamlining and strengthening the procedures and processes with regard to handling and maintenance of records, transfer of securities and payment of dividend or interest or redemption by the Registrar and Transfer Agents (RTAs), Issuer Companies and Bankers to Issue (see circular dated 20th April 2018). The key highlights of the guidelines are as below:

These norms are also applicable for issuer companies and bankers to an issue.

The documents prescribed under the guidelines are required to be maintained for a period of not less than eight years after completion of the relevant transactions by bankers to an issue, issuer companies or by RTAs on behalf of such firms.

RTA’s activities have to be strictly monitored by issuer companies.

Firms need to ensure that their in-house share transfer activities are in compliance with the relevant norms as applicable to them, in case share transfer agent activities are carried out in-house by issuer companies.

The issuer company, RTA and the dividend, interest, and redemption processing bank will have to ensure that the master file, having the detailed list of beneficiaries of dividend or redemption, needs to include company name, folio number and account details among others.

The file needs to be shared with the banker through a secured process. The processing bank will have to ensure that any dividend, interest and redemption instrument lying unpaid beyond the validity period of the instrument needs to be cancelled. Besides, such amount that has been transferred earlier by the issuer in the said account will have to be credited back immediately to the issuer company.

RTAs and issuer companies will have to ensure that a folio once allotted to a person should never be re-allotted to any other person under any circumstances.

RTAs and issuer companies would need to ensure that all updation in the folio records shall be enabled only through front end modules. No back-end entry or updation or correction would be permitted.

RTAs are required to take prior approval from the company similar to cases of transfers and transmissions, in case of any correction of errors.

Enhanced due diligence has to be exercised by the issuer company and RTAs, where dividend, interest and redemption remains unpaid for at least three years and where Permanent Account Number (PAN) as well bank account details not available in the folio. RTAs need to maintain a list of such account folios and share with the issuer company at the end of every quarter of a financial year.

All RTAs are required to carry out an internal audit on an annual basis by independent qualified chartered accountants or company secretaries or cost and management accountants, who do not have any conflict of interest.

Such auditors will need to have a minimum experience of three years in the financial sector and need to be appointed for a maximum term of five years, with a cooling-off period of two years.

The RTA will have to submit a copy of report of the internal audit to the issuer company within three months from the end of the financial year.

The governing council of the RTA would comprise the Board of Directors / Board of Partners or proprietor. The governing council of the RTA will have to consider the report of the internal auditor and take steps to rectify the deficiencies, if any.

RTA would have to send the action taken report to the issuer company within one month and a copy needs to be maintained by it. The audit observations along with the corrective steps taken by the RTA need to be placed before the issuer company’s board of directors.

On 2nd April 2018, SEBI amended its Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations), wherein it has been stipulated that every recognised clearing corporation providing clearing and settlement services for commodity derivatives would ensure guarantee for settlement of trades including goods delivery.

If an FPI has a Bank, Sovereign Wealth Fund, Insurance or Reinsurance company or a Pension Fund as its institutional investor, then such an applicant shall be deemed to be broad based, subject to the condition that such institutional investors would, jointly or separately, hold more than fifty percent of the shares or units of the fund in the applicant fund at all times.

In cases where broad based status is achieved on the basis of investors of an underlying fund, then such underlying fund would also be required to fulfil the extant eligibility requirements as specified by SEBI for FPIs from time to time.

Exit of some investors from a broad based fund will not result in immediate loss of Category II status of such a fund. Such a fund may regain broad based status within a period of 90 days, failing which, the fund shall be appropriately re-categorised.

FPIs would have to comply with the “fit and proper person” criteria as specified in SEBI (Intermediaries) Regulations, 2008.

FPIs would have to provide any additional information or documents including beneficiary ownership details of their clients as may be required by the designated depository participant or SEBI or any other enforcement agency to ensure compliance with Prevention of Money Laundering Act (PMLA), 2002 the Financial Action Task Force standards, and SEBI.

The designated depository participant engaged by an applicant seeking registration as FPI needs to ensure that equity shares held by foreign portfolio investors are free from all encumbrances.

On 10th April 2018, SEBI amended its regulation on Infrastructure Investment Trusts. The significant amendments are as below:

The term “institutional investor” iss defined as a qualified institutional buyer, family trust, or systemically important NBFCs registered with RBI or intermediaries registered with SEBI, all with net-worth of more than INR 500 crore, as per their last audited financial statements.

The amended regulation specifies the requirement of filing a final placement memorandum with SEBI within ten working days of listing of the units.

InvITs have been permitted to invest in infrastructure projects through SPV or its holding companies, subject to no other shareholder or partner of such SPV or holding companies having any rights that prevent the InvIT from complying with the provisions of the SEBI InvIT Regulations.

The inclusion of an appropriate mechanism for resolution of disputes between the InvIT and other shareholders or partners in the SPV or holding company in a shareholders’ or partnership agreement has been mandated.

In case of any inconsistency between such agreements and the SEBI InvIT Regulations, the provisions of the SEBI InvIT Regulations would prevail.

The deadline for submission of the report of the audited accounts of the InvIT to the stock exchanges is within sixty days from the end of the relevant financial year.

InvITs are required to make the disclosure of outstanding material litigations and regulatory actions against in the preceding five years.

Subsequent to the amendment of InvITs regulation, SEBI amended its REITs regulations, 2014. The major highlights of the amended regulation are as below:

The definition of “real estate assets” and “REIT assets” has been amended to clarify that such assets include assets held on a freehold as well as on a leasehold basis. Such assets held by the holding company of the entity have been included under the definition of real estate assets and REIT assets.

While considering the eligibility of the entities categorised as the sponsor group under REITs regulation, only the following persons or entities would be considered:

a person or entity who is directly or indirectly holding an interest or shareholding in any of the assets or SPV or holding companies proposed to be transferred to the REIT,

a person or entity who is directly or indirectly holding units of the REIT on post-issue basis and

a person or entity whose experience is being utilised by the sponsor for meeting with the eligibility conditions required under REIT Regulations.

Such eligibility conditions require that the sponsor or its associates have a minimum of five years of experience in the development of real estate or fund management in the real estate industry. However, in the event the sponsor is a developer, at least two projects of the sponsor are required to have been completed.

In case the REIT chooses to invest in properties through its holding company, no other shareholder or partner of the holding company would have any rights that prevent the REIT or the holding company or any SPV from complying with the terms of the SEBI REIT Regulations.

It would be mandatory for the shareholders’ or partnership agreement, if any, between such other shareholder or partner, to provide for an appropriate mechanism for resolution of disputes between the REIT and other shareholders or partners in the holding company and/or SPV. Further, in case of any inconsistency between such agreements and the SEBI REIT Regulations, the provisions of the SEBI REIT Regulations would prevail.

The manager, in consultation with the trustee, would be required to appoint the number of nominees to the board of directors or the governing board of such SPV or the holding company, as applicable, which are in proportion to the shareholding or the holding interest of the REIT in such SPV or holding company.

Certain restrictions have been imposed on investments of REIT assets. The REITs are permitted up to 20 percent of the value of REIT assets to be invested in unlisted equity shares of companies which derive not less than 75 percent of their operating income from real estate activity. However, such investments made in unlisted equity shares of a company, in under construction or completed and non-rent generating properties, would be held by the REIT for a minimum period of three years from the date of completion or from the date of purchase, as applicable.

Additionally, the requirement that a minimum of 75 percent of the value of the assets of the REIT shall generate rent has now been discarded.

The amendment with respect to disclosure in the litigation section of offer document or placement memorandum and Valuation Report is same as those for InvITs.